Leosghost - 2:37 am on Mar 27, 2013 (gmt 0)
What if someone from e.g. Zimbabwe one day decides to open an adsense account. And since Zimbabwe is nowhere to be found in adsense payment settings our hero flies to France and opens a bank account so that Google Ireland would issue payments. He then uses his French bank card in Zimbabwe to take out cash from an ATM. Is this taxable too? It should be in Zimbabwe, but is it in France? And if yes then do French really need to see some papers that he payed taxes in Zimbabwe to keep tax-dogs on leash?
Would depend ( mainly ) if France has a reciprocal ( back to back ) tax agreement with Zimbabwe..
If so ? .. I can ask by phone ( I'm not scheduled to physically be in their offices again ..25kms from where I live ..until after easter )..but.. might not get a reply within 72 hours ..( depending on who is around to give an opinion ) and then it will be the weekend..so I won't know if France and Zimbawe have "back to back" tax agreements*( see below ) , for sure, 'til maybe next week..
France and tax offices ( and other government departments ) and weekends cannot exist in the same space time ;)
But here is my non definitive ( and does not constitute tax advice etc nor engage the French tax offices etc ) take on it..based upon what I've seen ..and conversations with those who have the power to decide such matters here..
"Our hero" ;)
Flies to France to open a bank account ..the bank will ask is "our hero" resident...or isn't (s)he..and to provide proof of either resident status ..or proof of non resident status..in both cases, a passport will be asked for..and often another photo ID will be required in addition..a copy of these and other details ( if resident, such as lease / mortgage papers, and utility bills etc ) will be made by the bank..
Non resident bank accounts are much harder to get under the anti drug money laundering laws than they used to be..
And non resident bank accounts get automatically flagged to "the fisc" as soon as they are opened..with all the details about the account holder ..including passport details and foreign address etc ..
Any money used to open the account will have to be "justified"..usually they do not accept large amounts of cash ..they prefer EFT as opening deposits..
Incoming amounts will be flagged to the "banque de France" BDF ( overseeing regulatory body here ) and possibly directly to "the fisc"..or BDF will pass on such details to the fisc ( and others ) eventually ..
Outgoing amounts over a certain threshold are also flagged..and must be explained in writing ( even though exchange control regulations no longer officially exist here ) ..when I make EFT payments to my manufacturing facilities..I have to give written reasons why and what for..
If an account is set up..and then withdrawals are primarily via cards used in other countries..then this will be flagged by the bank and the BDF or and the fisc will look into it..and may freeze the funds until they are happy with the explanations .. because it will look exactly like money laundering..and if there is no back to back tax arrangement with Zimbabwe .. it will also look like tax avoidance..and also undeclared business activities..
If France and Zimbabwe do have reciprocal tax agreements ( unlikely IMO due to EU controls* ..but I may be wrong )..our hero would still have to provide official paperwork to the French Tax authorities ( could be done via their French bank ) showing that tax was paid in Zimbabwe..without such ..the French tax offices would most likely either freeze all funds..( here they can do sos without a court order..they just write a letter to the bank to say .."freeze all funds until we tell you otherwise" or have the bank remove tax at source..at a rate that our hero would not like ..
Then they would also ( while the account was frozen ) pass the details onto the URSSAF etc ..who would ask a judge to instruct the bank to take out what they considered to be their "cut"..
BTW..French company taxes and compulsory social payments can amount to over 50% of a company's gross earnings..( an accountant and / or good company structure can reduce that..and similarly to what swa66 posted about "deductibles" etc in Belgium, would also apply..but France is not as company friendly, as is say the UK..
Annual fixed overheads and statutory payments for running a French company are far higher than they are in the UK ..which is why many French people leave to work on the other side of the channel..
Let us suppose that our hero is not barred or otherwise impeded from being a company director of a UK company..and does not wish to be resident in France..
Simplest thing to do would be ..open a UK limited company ( can be done on line for less than £100.00 even including an official UK address etc ) .and takes less than 15 minutes with no need to visit the UK..
Many UK companies have non resident directors ..
Company registration agents frequently supply bank introductions..usually to banks who have offices worldwide ( HSBC springs to mind ).thus our hero could have a UK registered business, a UK bank account into which they could receive adsense or other payments ..and a withdrawal card which would work in almost any country worldwide..and the UK company tax rate ( even without an accountant doing their "wizardry" ) is waay bellow that of France..
Our hero would be "legit"..and be paying taxes at UK rates ( and the social payments are also much lower in the UK than they are in France )..and they would have a paper from the UK tax authorities to say they had paid taxes :)
French residents cannot do this ( without the French Tax authorities coming down on them like a ton of bricks )..unless they set it up very very carefully..the various advisors in France who claim to be able to do this for French or expats..can't actually make it work ( the fisc gets the client eventually, and the "advisors" look for another pigeon )..that is when I tend to get the emails or the phone calls asking for "help"..
Major topic drift..( apologies mods and admins ;) but..if it can prevent someone reading here from making the wrong decisions and having problems with the fisc and the URSSAF etc..
HTH :) and that it is reasonably clear ( and not too many typos as I'm writing in English but thinking in French on this subject ;) ..it is near 04.00 am Wednesday here and fatigue is setting in..